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Politics : Idea Of The Day

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To: Jack T. Pearson who wrote (9134)9/7/1997 9:31:00 PM
From: bobby beara   of 50167
 
Jack, most mutual fund managers are touting small caps because valuations are reasonable, whereas, the multi-national nifty fifty type large caps are starting to look top heavy, with slowing earnings growth due to high dollar. Actually a lot of fund managers are now looking at overvalued stocks like KO as risky, because of high p/e, high book value, downgraded debt and slowing earnings growth.

There just aren't any bargains left in the bigs. Not so with the little guys. So the big money influx will bring up the bigs but I think a lot of the money will flow to small caps, where you can find lots PEG ratios lower than 1. KO's PEG ratio is somewhere in the 4-6 area.

Small stocks have been greatly outperforming the bigs, since the market topped on Aug. 6th and I think that will continue for a little while.

good luck,
Bob
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